In India, beginning a new business requires approvals from multiple States and central agencies, quite a task for small startups with limited capital and understanding of procedures. According to World Bank report on ‘Ease of Doing Business in India’, the number of clearance procedures is just double than that of required in developed countries.
Established Corporate houses have dedicated departments and team of experts to address the demanding complex procedures that come in their way while seeking such clearances. But, a new player cannot afford to have such backing. A complex and diverse economy like India cannot run efficiently without involvement of private sector. Start-Up India, thus can play a crucial role in bridging this gap and help to develop an alternative model of private investment in the country.
“Startup India policy is expected to revitalise startups that are using innovation and technology to change unorganised and largely fragmented sectors like cleaning into professionally-run scalable businesses. I am extremely positive about not only the direct effect of such a policy but the overall boost to the startup environment and the trickledown effect it will create,” says Manu Dhawan, Co-Founder & CEO, Spaceworx Services Pvt Ltd.
Cleaning sector in India has witnessed a number of startups spurting across the diverse range of related domains including manufacturing, services and supply chain management with all entrepreneurial skills teaming together. Despite all the challenges, the highly unorganised sector has seen some very successful ventures grew over the past few years. The new Start-Up India policy can give them a new boost as well as inspire the new players to ride the startup wagon.
With encouraging remarks from the Finance minister that government will facilitate the startups through minimizing hassles and despite world economic slowdown, Indian economy is on growth path, the startup industry pins high hopes. Government is keen on extending support and a platform to the ideas and innovators, which again strengthens the confidence of Venture Capitalists and funding firms in Indian marketplace and budding entrepreneurs.
‘The Startup India policy is going to get some eyeballs to the cleaning space. So far plugging under the on-demand household services umbrella, professional cleaning could get its due as a full-fledged start up industry. It can be aligned with PM Modi’s ‘Swachh Bharat’ and we could have a whole new sunrise industry in cleaning,” avers Rupal Bansal, Co-Founder, Kleenr.
The awaited GST bill will also be a game changer in that direction, with other key reforms like Mudra Scheme and Skill India will play a supportive role for the Starups. An industry friendly tax regime will be a good move in that direction, which is soon expected to be in place. As per a Nasscom report, in 2015 alone, there were 4,200 startups in India, which are expected to reach 10,000 by 2020.
“Cleaning sector is mainly driven by unorganised players. The major challenge we face is from the tax evaders for which the taxation policies should be more supportive. An entrepreneur-friendly taxation regime under Start Up Policy would be certainly helpful,” expects Praveen Khandelwal, CEO, Pranay Impex.
The plus point with cleaning sector is that it addresses routine chores including both domestic and professional premises apart from public spaces. The entrepreneurs need not to create customer base and work demand combined with ease of beginning using small workforce that is available in plenty. What required are just the basic organisational and managerial skills from business capitalisation and service delivery point of view. So the prospective environment for funding, limited state intervention, and vast market to explore, cleaning sector definitely has a good opportunity to bank upon.
The other side to look upon is manufacturing of cleaning equipment, machineries and accessories in India. So far the sector is largely operating on partnership and distribution model, with few hard core domestic manufactures. The positive environment for startups can help existing and new entrepreneurs to establish standalone manufacturing units in the country.
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Startup India policy: Highlights
• No inspection for first three years
• Startup India hub to provide single-point contact platform
• Fast-track mechanism for startup patent applications
• 80% fee exemption on patents filing by startups
• Portal for clearances, registrations, approvals. Mobile app for online registration of startup company in one day
• Tax rebate on capital gains
• Panel of legal facilitators for startups to file IP (patents, designs, trademarks) – costs borne by government
• Relaxed norms of public-procurement for startups. No requirement of turnover or experience, but no relaxation of quality • Fund of funds starting from Rs2,500 crore upto Rs10,000 crore
• Faster exits for startups
• Credit guarantee fund for startups
• Tax exemption to startups for three years to promote growth
• Annual Incubator Grand Challenge to create world class incubators in India • Innovation Core Programs for school students in five lakh schools • National and International Startup Festivals to provide visibility
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